Some of the ugly ducklings, Goldman Sachs, Bank of America, people hate, they're in the press -- negative press -- never leave Goldman alone. Goldman more or less bottomed at $50 but was $80 or so during the real crunch. You know what Goldman's earned since mid-'08? Thirty-five bucks a share. The stock's $150 they're earning twenty bucks, right? Book is $130, we own Goldman, we buy Goldman on dips.
I think Goldman's a great, large cap financial value-guys' stock. Same thing with B of A.
I'm a sum of the parts guy, smart guy's running it. I hated the Senate report, the investigation report. Some of it read very poorly. But it's given them a lot of religion about how they treat clients and how they appear in the press. I'm a sum of the parts guy, you've got three or four distinct divisions. They're all over-capitalized. Great asset management business, amazing investment bank. I think more powerful than GreenHill, and you look at GreenHill's multiple. So you apply a normal 18 P/E on their asset management business, maybe a 25 or 30 P/E versus GreenHill's 40 on the M&A advisory business, and you're sitting on the broker-dealer for nothing. With excess capital.
Okay, see that dip [in the crash of '08]? That was an aberration. But you look in the middle of the dip, it was 80 or 90, they've earned thirty-five bucks a share since. I don't think the dividend is the story here. I think it's just an earnings-driven story in this expanding economy where the world needs financiers like a Goldman.
~Michael Price, president of MFP Investors LLC, Bloomberg's "Surveillance Midday", May 3, 2011
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